$225,000 to develop a new product line
July 2, 2016
Problem: Product innovation had created a ten year wave of success until foreign competition began commoditizing the product and undermining its earnings.
Response: Management invested in adapting the core technology to a new product and established early traction with new distribution partners. Scaling up market penetration required capital for additional tooling, inventory, and marketing costs, and banks were spooked by the core business’ negative sales and earnings trends.
Solution: The BDC provided the company a $225,000 SBA term loan to finance the initial eighteen month ramp up. Then, based on increasing sales and profits, the BDC added a $150,000 line of credit to support the corresponding increase in accounts receivable and inventory.
Epilog: Company is self-financing continued growth from profits.